Bond selloff dangers liquidation of world’s most crowded trades- BofA By Reuters

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© Reuters. FILE PHOTO: A Financial institution of America emblem is pictured within the Manhattan borough of New York Metropolis, New York, U.S., January 30, 2019. REUTERS/Carlo Allegri

LONDON (Reuters) – World authorities bond losses are on target for the worst 12 months since 1949, and this 12 months’s bond crash threatens credit score occasions and a liquidation of the world’s most crowded trades, BofA mentioned in a be aware on Friday.

Bond funds recorded outflows of $6.9 billion in the course of the week to Wednesday, whereas $7.8 bln was faraway from fairness funds and buyers ploughed $30.3 bln into money, BofA mentioned in a analysis be aware citing EPFR knowledge.

BofA added that buyers face extra inflation, rates of interest and recession shocks, including {that a} bond crash meant {that a} excessive in credit score spreads and low in shares has not but been reached.

Investor sentiment is the worst it has been for the reason that 2008 international monetary crash, the be aware mentioned.

Aggressive charge hikes from main central banks to comprise inflation, at the same time as development slows, has unnerved world markets and sparked a contemporary surge in bond yields this week.

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